POLITICAL OFFICE-BEARERS PENSION FUND (P.F ) CONSOLIDATED RULES

Transcription

1 POLITICAL OFFICE-BEARERS PENSION FUND (P.F ) CONSOLIDATED RULES Note: this consolidated set of Rules has been prepared to assist Fund members, but has not yet been registered by the Registrar of Pension Funds and should therefore be taken as an unofficial document. In the event of any errors in this consolidation or any clash between this document and the registered Rules, the registered Rules will prevail. Includes registered Amendments 1 to 6. October 2013 P.F. 12/8/35658

2 I N D E X CONTENTS PAGE 1. GENERAL 1 2. DEFINITIONS 1 3. MEMBERSHIP CONTRIBUTIONS PENSION BENEFITS PURCHASE AND COMMUTATION OF PENSION DEATH BENEFITS TERMINATION OF SERVICE TRANSFERS INTO THE FUND TERMINATION OF CONTRIBUTIONS DEDUCTION FROM BENEFITS MANAGEMENT OF THE FUND FINANCIAL PROVISIONS ADMINISTRATION OF THE FUND ALTERATIONS INTERPRETATION OF RULES AND DISPUTES MISCELLANEOUS PROVISIONS GREATER BENEFITS PROVISIONS IN RESPECT OF THE SURPLUS ACT PAYMENT OF BENEFITS RESULTING FROM ONCE-OFF ADDITIONAL CONTRIBUTIONS BY THE EMPLOYER 46 A. CALCULATION OF MAXIMUM BENEFIT 48 B. EXAMPLES REVALUED PENSIONABLE SALARY 50 C. EXAMPLES EQUALISATION AMOUNT 51

3 1. GENERAL 1.1 The POLITICAL OFFICE-BEARERS PENSION FUND was established on 27 April The Registered Office of the FUND shall be Parliament, Plein Street, Cape Town, 8001 (PO Box 2164, Cape Town 8000) 1.3 The object of the Fund is, in terms of these RULES, to provide retirement and other benefits for MEMBERS and Deferred Beneficiaries as well as for their beneficiaries in the event of their death. 1.4 The Fund, in its own name, shall be capable in law of suing and of being sued and of acquiring, holding and alienating property, movable and immovable. 1.5 Notwithstanding the registration of these revised RULES in terms of the Act after 01 June 2002, the revised RULES shall take effect from 01 June DEFINITIONS In these RULES words defined in the ACT and not in the RULES shall have the meanings assigned to them in the ACT and, unless inconsistent with the context, all words and expressions signifying the singular shall include the plural and vice versa, words and expressions implying the masculine gender shall include the feminine, and the following words and expressions shall have the following meanings: "ACT" shall mean the Pension Funds Act, 1956, and the regulations framed thereunder. "ACTUARY" shall mean the ACTUARY appointed in terms of these RULES, who shall be a Fellow of the Institute of Actuaries of England or of the Faculty of Actuaries in Scotland or of the Society of Actuaries of America or of any other institute, faculty, society or chapter of actuaries approved by the MINISTER. ADDITIONAL SERVICE BENEFIT shall mean an amount equal to the QUALIFYING SERVICE FACTOR times the REVALUED PENSIONABLE SALARY on the retirement, death or withdrawal of a MEMBER, provided that in calculating this amount upon the retirement, death or withdrawal of a MEMBER after 31 March 2011 and up to or in consequence of the next election following the 2009 election (but not thereafter), the REVALUED PENSIONABLE SALARY figure used shall not be lower than the REVALUED PENSIONABLE SALARY that would have applied if the MEMBER had retired, died or withdrawn from the FUND on 31 March ADDITIONAL SERVICE BENEFIT PAYMENT shall mean the amount payable by the PRINCIPAL EMPLOYER in respect of each MEMBER in SERVICE in terms of Rule

4 - 2 - "ADMINISTRATORS" shall mean ADMINISTRATORS approved in terms of Section 13B of the ACT and appointed in terms of these RULES. "APPROVED FUND" shall mean a pension, provident or retirement annuity fund registered in terms of the PENSION FUNDS ACT and approved as such by the REVENUE AUTHORITIES, but shall exclude a PRESERVATION FUND approved by the REVENUE AUTHORITIES as a provident fund. "AUDITOR" shall mean an AUDITOR registered under the Public Accountants' and Auditors' Act, 1991, appointed in terms of these RULES. CATEGORY A MEMBER shall mean a MEMBER who has been notified to the TRUSTEES by the EMPLOYER as a MEMBER who has not reached age 49 years and who is not a member of the CLOSED PENSION FUND. CATEGORY B MEMBER shall mean a MEMBER who has been notified to the TRUSTEES by the EMPLOYER as a MEMBER who has reached age 49 years and who is not a member of the CLOSED PENSION FUND. CATEGORY C MEMBER shall mean a MEMBER who is a member of the CLOSED PENSION FUND. CLOSED PENSION FUND shall mean the Fund established in terms of the Closed Pension Fund Act, COMMENCEMENT DATE shall mean 27 April DEFERRED BENEFICIARY shall mean a MEMBER who is entitled to receive a PAID-UP BENEFIT in terms of Rule 8.2.2(b). DIPLOMAT shall mean a diplomatic representative of the Republic of South Africa who was a MEMBER in SERVICE immediately prior to his or her appointment as a diplomatic representative, and at the time of his or her appointment as such is not eligible to become a contributory member of the Government Employees Pension Fund. DISABILITY ARRANGEMENT shall mean a separate disability arrangement set up by an EMPLOYER to provide benefits for employees who are MEMBERS in the event of their disablement. DISABILITY MEMBER shall mean a MEMBER who is in receipt of a disability income benefit in

5 - 3 - terms of the DISABILITY ARRANGEMENT, and who has not yet taken benefits in terms of the RULES. Definition added by Rule Amendment 5 w.e.f. 1 April "EMPLOYER" shall mean the PRINCIPAL EMPLOYER and an EMPLOYER admitted to the Fund with the consent of the MINISTER and shall include: (i) (ii) (iii) The National Assembly; The National Council of Provinces; The nine Provincial Legislatures; and (iv) Any department of State where POLITICAL OFFICE-BEARERS are in SERVICE; provided that in the case of a DEFERRED BENEFICIARY, EMPLOYER shall mean the employer by whom such MEMBER was employed at the date of termination of his/her SERVICE. EQUALISATION AMOUNT shall mean the amount credited to the FUND CREDIT of a MEMBER from the Employer Surplus Account No. 1 on his or her retirement, death or withdrawal, if the MEMBER: (a) leaves SERVICE in consequence of the 2009 general election or at a date earlier than the 2009 general election, and who has been in SERVICE for not less than one complete TERM OF OFFICE or, if the MEMBER s SERVICE did not commence at or as a consequence of an election, has been in SERVICE for more than 5 (five) years; or (b) leaves SERVICE after the 2009 general election (and not in consequence of that election) and who has been in SERVICE for more than one complete TERM OF OFFICE or, if the MEMBER s SERVICE did not commence at or as a consequence of an election, has been in SERVICE for more than 5 (five) years. This amount shall equal 20% (twenty per cent) of that MEMBER S PENSIONABLE SALARY per month during each month of SERVICE together with FUND INTEREST; provided that the amount is limited to the difference, as calculated by the ACTUARY, between: (i) the balance of the FUND CREDIT (prior to the addition of the EQUALISATION AMOUNT and excluding any contributions made by that MEMBER in terms of Rule 4.1.2, any contributions made by that MEMBER in terms of Rule which are made after 15 (fifteen) years of SERVICE, any amount transferred in terms of Rule 9.1, and FUND RETURN on these amounts,) and (ii) the MAXIMUM BENEFIT, with a minimum of zero; provided that SERVICE as a DIPLOMAT does not constitute SERVICE for the purposes of calculating the EQUALISATION AMOUNT or assessing the MEMBER s eligibility for such an amount; provided further that SERVICE already taken into account in the determination of a previous TERMINAL GRATUITY or EQUALISATION AMOUNT paid to or applied for the benefit of the MEMBER does not constitute SERVICE for the purposes of calculating the EQUALISATION

6 - 4 - AMOUNT or assessing the MEMBER s eligibility for such an amount. EQUALISATION PREFUNDING AMOUNT shall mean the amount payable by the PRINCIPAL EMPLOYER in terms of Rule "FINANCIAL YEAR" shall mean the twelve-month period ending on 31 March each year. FORMER MEMBER shall mean a person whose membership of the FUND has ceased and in respect of whom the FUND has no liability except as may be created in terms of the SURPLUS ACT. "FUND" shall mean POLITICAL OFFICE-BEARERS PENSION FUND. "FUND CREDIT" shall mean for each MEMBER at any particular date the sum of: (a) an amount equal to the accumulated value of the contributions made by the EMPLOYER in respect of the MEMBER in terms of Rule 4.2.1; (b) his/her contributions received by the FUND in terms of Rule 4.1.1; (c) any contributions made in terms of Rule 4.1.2; and (d) if applicable, any contributions made in terms of Rule 4.2.4; and (e) the ADDITIONAL SERVICE BENEFIT, if payable, on withdrawal from the FUND; and (f) if applicable, any amounts transferred in terms of Rule 9.1; (g) any amount apportioned by the TRUSTEES in terms of Section 15C of the ACT; and (h) the TERMINAL GRATUITY, if payable, on withdrawal from the FUND; (i) the EQUALISATION AMOUNT if payable, on withdrawal from the FUND; together with FUND INTEREST. (e) and (i) of definition amended by Rule Amendment 6 w.e.f. 1 April FUND INTEREST shall mean the interest rate, whether positive or negative, as determined by the TRUSTEES from time to time after consultation with the ACTUARY, taking account of the investment returns earned by the FUND after making allowance for: (a) (b) interest, dividends and capital appreciation; and capital depreciation, expenses and taxes. INSURED PORTION shall mean in relation to all MEMBERS during any particular FINANCIAL YEAR, the amount of death cover purchased from a REGISTERED INSURER. Such cover shall be determined from time to time by the TRUSTEES in accordance with the REGISTERED INSURER S rates applicable to the MEMBERS and any conditions laid down by the REGISTERED INSURER

7 - 5 - and shall be notified to the MEMBERS by the TRUSTEES. MAXIMUM BENEFIT shall mean an amount as calculated by the ACTUARY to equal the deemed capital value of a pension annuity of 92,5% (ninety-two comma five per cent) of the MEMBER s REVALUED PENSIONABLE SALARY which could be purchased for that MEMBER before any commutation thereof, on the day before his or her retirement, death or withdrawal, based on the table and methodology annexed hereto as Annexure A ; provided that in calculating this amount upon the retirement, death or withdrawal of a MEMBER after 31 March 2011 and up to or in consequence of the next election following the 2009 election (but not thereafter), the REVALUED PENSIONABLE SALARY figure used shall not be lower than the REVALUED PENSIONABLE SALARY that would have applied if the MEMBER had retired, died or withdrawn from the FUND on 31 March "MEMBER" shall mean an eligible person who, having been admitted to MEMBERSHIP of the FUND in terms of the RULES, has not ceased to be a MEMBER and shall include a DISABILITY MEMBER, but for the purposes of the INSURED PORTION and contributions to the FUND in terms of Rule 4 shall exclude a DEFERRED BENEFICIARY. Definition amended by Rule Amendment 5 w.e.f. 1 April MINIMUM INDIVIDUAL RESERVE shall mean an amount as defined and calculated in terms of section 14B of the SURPLUS ACT. "MINIMUM RETIREMENT DATE" shall mean the last day of the month in which the MEMBER attains age 50 years. MINISTER shall mean the Minister of Finance. PAID-UP BENEFIT shall mean the FUND CREDIT retained in the FUND in terms of Rule 8.2.2(b), increased by FUND INTEREST until it becomes payable in terms of Rule 5.1.2, Rule 6 or Rule "PAST SERVICE" shall mean (a) the period of service determined in accordance with the following formula: A X C B Where A = that part of the MEMBER S FUND CREDIT which arises from the portion of the contributions made by the EMPLOYER in respect of the MEMBER in terms of Rule which is defined as contributions in respect of PAST SERVICE

8 - 6 - B = C = that part of the MEMBER S FUND CREDIT which arises from the contributions made by the MEMBER in terms of Rule and the total contributions in respect of SERVICE made by the EMPLOYER in respect of the MEMBER in terms of Rule the MEMBER S SERVICE as defined in these RULES PLUS (b) any period of PENSIONABLE SERVICE with a previous EMPLOYER in respect of which an amount was transferred in to this FUND in terms of Rule 9.1 subject to a maximum of (c) the period between the date on which the MEMBER attained the age of 16 years and the date at which PAST SERVICE is determined, LESS the MEMBER S SERVICE in the FUND as determined at the same date. "PENSION" shall mean the annuity purchased from a REGISTERED INSURER in terms of the provisions of these RULES. PENSIONABLE SALARY shall mean, with effect from 1 April 2011, 60% (sixty per cent) of the total remuneration package (being the salary and allowances as proclaimed by the President in terms of the Remuneration of Public Office Bearers Act, Act No 20 of 1998) of each MEMBER provided that :- (i) in the case of a POLITICAL OFFICE BEARER classified as a DIPLOMAT by his / her EMPLOYER, his/her PENSIONABLE SALARY for the purposes of the FUND shall be his/her basic annual salary and such other allowances which the EMPLOYER determines are pensionable and that are advised to the FUND in writing; (ii) for the purposes of the FUND, PENSIONABLE SALARY shall be determined on the first day of each month of membership of the FUND; and (iii) the PENSIONABLE SALARY of a DISABILITY MEMBER shall be his / her PENSIONABLE SALARY at the date on which his / her disablement commenced. Subject to the provisions of Rule 6.2.5, if the benefit payable to the DISABILITY MEMBER is increased, his / her PENSIONABLE SALARY shall be increased in the same proportion. Definition (iii) amended by Rule Amendment 5 w.e.f. 1 April PENSIONABLE SERVICE shall mean the total of the MEMBER S SERVICE and the MEMBER S PAST SERVICE as defined in these RULES.

9 - 7 - "POLITICAL OFFICE-BEARER" shall mean: (a) the Deputy President; (b) (c) (d) (e) (f) (g) a Minister and a Deputy Minister; a Member of the National Assembly and a permanent delegate to the National Council of Provinces; the Premier and a Member of the Executive Council of a province; a Member of a Provincial Legislature; a DIPLOMAT; or any other person recognised as a POLITICAL OFFICE-BEARER for the purposes of Section 190A of the Interim Constitution. "PRINCIPAL EMPLOYER" shall mean the Minister of Finance. "PRINCIPAL OFFICER" shall mean the PRINCIPAL OFFICER of the FUND appointed in accordance with these RULES. "PRESERVATION FUND" shall mean a fund established for the purpose of preserving benefits accruing to MEMBERS in the event of their MEMBERSHIP of the FUND ceasing prior to their retirement. QUALIFYING SERVICE FACTOR shall mean the factor to be used in the calculation of the ADDITIONAL SERVICE BENEFIT which may be due to a MEMBER, and calculated as 20% (twenty per cent) for every completed year of SERVICE as well as a pro-rata share of this percentage for every incomplete year of SERVICE; with a maximum of 200% (two hundred per cent) minus any previous QUALIFYING SERVICE FACTOR(s) in respect of any previous ADDITIONAL SERVICE BENEFIT(s) paid to or applied for the benefit of the MEMBER; provided that SERVICE as a DIPLOMAT does not constitute SERVICE for the purpose of calculating the QUALIFYING SERVICE FACTOR; and further provided that SERVICE that was taken into account in the calculation of any previous QUALIFYING SERVICE FACTOR(s) in respect of any previous ADDITIONAL SERVICE BENEFIT(s) paid to or applied for the benefit of the MEMBER shall be excluded from the calculation of the latest QUALIFYING SERVICE FACTOR. "REGISTERED INSURER" shall mean an insurer registered in terms of the Long Term Insurance Act No 52 of "REGISTRAR" shall mean the Registrar of Pension Funds, referred to in the ACT.

10 - 8 - REVALUED PENSIONABLE SALARY shall mean a MEMBER S PENSIONABLE SALARY as actually earned, adjusted to take into account any cost of living increases that may have been granted to MEMBERS during the MEMBER s period of SERVICE, and shall be determined by applying a factor as set out below to the total PENSIONABLE SALARY earned by the MEMBER in the relevant FINANCIAL YEAR, and then by calculating the REVALUED PENSIONABLE SALARY over all periods of SERVICE that are to be taken into account, as the average of the adjusted PENSIONABLE SALARIES actually earned by the MEMBER in each FINANCIAL YEAR (and therefore taking account of the exact period of SERVICE, if any, in each FINANCIAL YEAR), expressed as an amount per annum. The REVALUED PENSIONABLE SALARY determined as specified above shall be subject to a minimum of the PENSIONABLE SALARY per annum actually earned by the MEMBER at the date on which the MEMBER ceased SERVICE. SERVICE as a DIPLOMAT does not constitute SERVICE for the purpose of this calculation. SERVICE that was taken into account in any previous calculation of a REVALUED PENSIONABLE SALARY in respect of any previous ADDITIONAL SERVICE BENEFIT or previous EQUALISATION AMOUNT paid to or applied for the benefit of a MEMBER does not constitute SERVICE for the purpose of this calculation. Period Factor for members who joined the Fund before 2 June 1999 Factor for members who joined the Fund on or after 2 June April 1994 to 31 March Year ending on 31 March Year ending on 31 March Year ending on 31 March Year ending on 31 March Year ending on 31 March Year ending on 31 March Year ending on 31 March Year ending on 31 March Year ending on 31 March Year ending on 31 March Year ending on 31 March

11 - 9 - These factors shall be revised each time a cost-of-living adjustment is granted to MEMBERS and a new table of factors shall be prepared by the ACTUARY at that time. The method of revision shall be that each factor in the previous table (for all years prior to the one in which the newly increased PENSIONABLE SALARIES shall apply) shall be increased by the percentage cost-ofliving adjustment that is granted. "REVENUE AUTHORITIES" shall mean the South African Revenue Services and any other statutory revenue authority whose approval of the FUND is required. "RULES" shall mean these RULES and such alterations hereof as may at any time be in force. "SERVICE" shall mean the period or periods during which a POLITICAL OFFICE-BEARER serves in that capacity with any of the EMPLOYERS and shall include any period during which a DISABILITY MEMBER is deemed to remain in SERVICE in terms of Rule In the case of a DEFERRED BENEFICIARY, SERVICE shall mean the period or periods during which he/she served as a POLITICAL OFFICE-BEARER in the employment of any of the EMPLOYERS. Definition amended by Rule Amendment 5 w.e.f. 1 April STAKEHOLDER shall mean a current MEMBER including a DEFERRED BENEFICIARY, a FORMER MEMBER and an EMPLOYER participating in the FUND. SURPLUS ACT shall mean The Pension Funds Second Amendment Act, 2001 and the regulations framed thereunder. SURPLUS APPORTIONMENT DATE shall mean 31 March 2002, the date determined by the BOARD OF TRUSTEES in terms of the SURPLUS ACT. TERM OF OFFICE, in relation to a current or former MEMBER, other than a DIPLOMAT, being each period in SERVICE commencing at or in consequence of the election in 1994 or any election after 1994, and ending at or in consequence of the next election following. TERMINAL GRATUITY shall mean a benefit credited to the FUND CREDIT of a MEMBER from the Employer Surplus Account No. 1 on his or her retirement, death or withdrawal only if he or she does not have his or her FUND CREDIT credited with the EQUALISATION AMOUNT (even if this amount is zero) in consequence of such retirement, death or withdrawal, and shall be calculated as the difference between: (a) an amount equal to 45% (forty-five per cent) of the PENSIONABLE SALARY of that MEMBER for every completed year of SERVICE, as well as a pro-rata share of this percentage for every incomplete year of SERVICE; and (b) the member s FUND CREDIT (prior to the addition of the TERMINAL GRATUITY and

12 excluding any contributions made by that MEMBER in terms of Rule 4.1.2, any contributions made that MEMBER in terms of Rule which are made after 15 (fifteen) years of SERVICE, any amount transferred in terms of Rule 9.1, and FUND RETURN on these amounts; with a minimum of zero; provided that SERVICE as a DIPLOMAT does not constitute SERVICE for the purposes of calculating the TERMINAL GRATUITY or assessing the MEMBER s eligibility for such an amount; provided further that SERVICE already taken into account in the determination of a previous TERMINAL GRATUITY or EQUALISATION AMOUNT paid to or applied for the benefit of the MEMBER does not constitute SERVICE for the purposes of calculating the TERMINAL GRATUITY or assessing the MEMBER s eligibility for such an amount; provided further that in calculating this amount upon the retirement, death or withdrawal of a MEMBER after 31 March 2011 and up to or in consequence of the next election following the 2009 election (but not thereafter), the PENSIONABLE SALARY figure used shall not be lower than the PENSIONABLE SALARY that would have applied if the MEMBER had retired, died or withdrawn from the FUND on 31 March TRUSTEES shall mean the TRUSTEES as appointed and elected in accordance with these RULES and their alternates when empowered to act as TRUSTEES in terms of these RULES.

13 MEMBERSHIP 3.1 Each POLITICAL OFFICE-BEARER in SERVICE on the COMMENCEMENT DATE was required to become a MEMBER of the FUND on that date. 3.2 Each POLITICAL OFFICE-BEARER who enters SERVICE after the COMMENCEMENT DATE must become a MEMBER of the FUND on the day on which he/she becomes a POLITICAL OFFICE-BEARER. 3.3 A MEMBER shall not be permitted to withdraw from MEMBERSHIP while he/she remains in SERVICE. 3.4 A MEMBER who has left SERVICE for any reason and has received all the benefits which may be due to him or her in terms of these RULES shall immediately cease to be a MEMBER.

14 4. CONTRIBUTIONS AND FUND ACCOUNTS Contributions by the MEMBER Each MEMBER shall contribute to the FUND at the rate of one twelfth of 7,5 per cent of his/her PENSIONABLE SALARY per month. After a MEMBER has been in SERVICE for 15 (fifteen) years he or she may, by notice in writing to the FUND, apply to exercise a once off option to cease contributing in terms of this Rule Such an application will be accepted by the FUND provided that, and shall have effect for such time as, the payroll system through which the MEMBER s contributions are paid to the Fund can accommodate this while ensuring that the contributions by the EMPLOYER continue to be paid. If this is not the case, such application shall not be accepted by the FUND. If a MEMBER who has made such application which has been accepted by the FUND subsequently takes up service with a different EMPLOYER whose payroll system cannot accommodate the arrangement set out above, the MEMBER will be required to resume contributing to the FUND in terms of this Rule However, if such a MEMBER subsequently moves again to take up service with a new EMPLOYER whose payroll system can accommodate the arrangement set out above, a new application to cease contributing may be made Each MEMBER may apply, by notice in writing to the FUND, to make additional contributions at such regular rate and frequency of payment as may be agreed by the FUND without any obligation on the part of the EMPLOYER to match such contributions. Such application shall be accepted by the FUND provided that, and shall have effect for such time as, the payroll system through which the MEMBER s contributions are paid to the Fund can accommodate these additional voluntary contributions. If a MEMBER who has made such application which has been accepted by the FUND subsequently takes up service with a different EMPLOYER whose payroll system cannot accommodate the arrangement set out above, the additional voluntary contributions shall cease. However, if such a MEMBER subsequently moves again to take up service with a

15 new EMPLOYER whose payroll system can accommodate the arrangement set out above, a new application to make additional voluntary contributions may be made Each MEMBER S contributions in terms of Rule and Rule shall be deducted monthly by his/her EMPLOYER from his/her salary or wages and paid to the FUND; provided that in the case of a DISABILITY MEMBER, his/her contributions to the FUND shall be paid from the benefit paid from the DISABILITY ARRANGEMENT for such time as he or she remains a DISABILITY MEMBER. Amended by Rule Amendment 5 w.e.f. 1 April Contributions shall be paid to the FUND within seven days after the end of the month in respect of which the contributions were made. Any MEMBER contributions not paid timeously will attract interest from the date on which they fall due at a rate determined in accordance with the provisions of the ACT. 4.2 Contributions by the EMPLOYER The EMPLOYER shall make contributions towards the retirement benefit of each MEMBER in its SERVICE at the rate of: (a) (b) in the case of a CATEGORY A MEMBER with effect from 27 April 1994, one twelfth of 4,75 per cent of his/her PENSIONABLE SALARY in respect of the MEMBER S SERVICE, PLUS one twelfth of 12,25 per cent of his/her PENSIONABLE SALARY in respect of his/her PAST SERVICE; in the case of a CATEGORY B MEMBER (i) for the period 27 April 1994 to 30 April 1999, one twelfth of 6,25 per cent of his/her PENSIONABLE SALARY in respect of the MEMBER S SERVICE, PLUS one twelfth of 13,75 per cent of his/her PENSIONABLE SALARY in respect of his/her PAST SERVICE; (ii) with effect from 01 May 1999, one twelfth of 4,75 per cent of his/her PENSIONABLE SALARY in respect of the MEMBER S SERVICE, PLUS one twelfth of 12,25 per cent of his/her PENSIONABLE SALARY in respect

16 of his/her PAST SERVICE; (c) in the case of a CATEGORY C MEMBER (i) for the period 27 April 1994 to 30 April 1999, one twelfth of 1,25 per cent of his/her PENSIONABLE SALARY in respect of the MEMBER S SERVICE, PLUS one twelfth of 8,75 per cent of his/her PENSIONABLE SALARY in respect of his/her PAST SERVICE; (ii) with effect from 01 May 1999, one twelfth of 4,75 per cent of his/her PENSIONABLE SALARY in respect of the MEMBER S SERVICE, PLUS one twelfth of 12,25 per cent of his/her PENSIONABLE SALARY in respect of his/her PAST SERVICE With effect from 1 April 2011, the EMPLOYER shall contribute at the rate of 1/12th (one-twelfth) of 4,8% (four comma eight per cent) of the PENSIONABLE SALARY of a MEMBER, to be credited to the Risk Reserve Account, less the cost of the DISABILITY ARRANGEMENT, funeral benefits and spouse s life insurance cover, for the month concerned. This is subject to the FUND agreeing with the PRINCIPAL EMPLOYER that, at the PRINCIPAL EMPLOYER s risk, the FUND receives from the EMPLOYER the premiums for the DISABILITY ARRANGEMENT, funeral benefits and spouse s life insurance cover, and pays these premiums on behalf of the PRINCIPAL EMPLOYER to the relevant INSURER With effect from 1 April 2011, the EMPLOYER shall contribute to the Administration Reserve Account at the rate of 1/12th (one-twelfth) of 0,7% (zero comma seven per cent) of the PENSIONABLE SALARY of a MEMBER. Such contribution may be reduced by amounts utilised from the Administration Reserve Account as agreed to by the TRUSTEES from time to time In the case of a DISABILITY MEMBER, contributions shall continue to be paid from the DISABILITY ARRANGEMENT to the FUND in respect of him or her for such time as he or she remains a DISABILITY MEMBER. Amended by Rule Amendment 5 w.e.f. 1 April 2014

17 In the case of a MEMBER, who is not re-elected to office in the general election held during 2004 or who is not re-appointed to office immediately after the general election held during 2004 or who ceased SERVICE before the 2004 general election, the EMPLOYER shall make a once-off contribution towards the MEMBER S benefit equal to one times the MEMBER S REVALUED PENSIONABLE SALARY as at the date of the 2004 general election multiplied by the MEMBER S TERM OF OFFICE subject to a maximum contribution of two times the MEMBER S REVALUED PENSIONABLE SALARY In the case of a greater benefit being granted to MEMBERS in terms of Rule 18, the EMPLOYER shall contribute such additional amount as agreed to between the FUND and the EMPLOYER from time to time when such greater benefit has been agreed to The PRINCIPAL EMPLOYER shall pay to the FUND, in respect of the EQUALISATION AMOUNT and the TERMINAL GRATUITY, at the rate of 1/12th (one-twelfth) of 20% (twenty per cent) of each MEMBER S PENSIONABLE SALARY, which amount shall be credited to the Employer Surplus Account No. 1. It is recorded that this payment, the EQUALISATION PREFUNDING AMOUNT, is not in respect of a MEMBER and never vests in a MEMBER, but is simply to prefund the EQUALISATION AMOUNT or the TERMINAL GRATUITY to the extent due on the retirement, death or withdrawal of a MEMBER. If the ACTUARY certifies at any time that the amount to the credit of the Employer Surplus Account No. 1 is insufficient to meet the total of the EQUALISATION AMOUNTS and TERMINAL GRATUITIES of all the MEMBERS at that time then the PRINCIPAL EMPLOYER shall pay to the FUND such amount as the ACTUARY advises is necessary to meet this difference, to be credited to the Employer Surplus Account No The PRINCIPAL EMPLOYER shall contribute, in respect of the ADDITIONAL SERVICE BENEFIT, at the rate of 1/12th (one-twelfth) of 12% (twelve per cent) of the MEMBER S PENSIONABLE SALARY, which contribution shall be credited to the Employer Surplus Account No. 2. If the ACTUARY certifies at any time that the amount to the credit of the Employer Surplus Account No. 2 is insufficient to meet the ADDITIONAL SERVICE BENEFITS of all the MEMBERS at that time then the PRINCIPAL EMPLOYER shall pay to the FUND such amount as the ACTUARY advises is necessary to meet this difference, to be credited to the Employer Surplus Account No.2.

18 Contributions by the EMPLOYER must be paid to the FUND within seven days after the end of the month to which they relate. Any EMPLOYER contributions not paid timeously will attract interest from the date on which they fall due at a rate determined in accordance with the provisions of the ACT. The EMPLOYER shall further ensure that the reconciliation of these contributions plus MEMBER contributions is delivered to the ADMINISTRATOR at the same time that the contributions are paid to the FUND. 4.2A Members General Account The FUND shall maintain an account designated the Members General Account which shall reflect the value of the assets that the FUND holds backing the MEMBERS FUND CREDITS at any particular date, with the following credits and debits in respect of each MEMBER:- 4.2A.1 Credits :- (i) Contributions by MEMBERS in terms of Rules and 4.1.2; (ii) Contributions by the EMPLOYER in terms of Rules and 4.2.6; (iii) Amounts that may be transferred from the Risk Reserve Account in terms of Rule ; (iv) Any amount that may be transferred from the Investment Smoothing Reserve Account as at 31 March 2016 in terms of Rule , or prior to that date for the purpose of stabilizing the investment returns of the FUND in terms of Rule ; (v) Amounts that may be transferred from the Administration Reserve Account in terms of Rule ; (vi) Amounts from the Employer Surplus Account no.1 or Employer Surplus Account no.2 that are to be credited to the FUND CREDIT of a MEMBER on retirement, death, or withdrawal, in terms of Rules and ; (vii) Amounts that may be transferred from the Employer Surplus Account no.3 in terms of Rule ; (viii) Amounts that may be transferred from the Member Surplus Account in terms of Rule ; (ix) Amounts that may be transferred from the Data Reserve Account in terms of Rule ; (x) An INSURED AMOUNT received in respect of a deceased MEMBER, in terms of Rule 7.1.1; (xi) Transfer amounts received by the FUND in respect of one or more

19 (xii) MEMBERS in terms of Rule 9.1; and FUND INTEREST, if positive. 4.2A.2 Debits :- (i) The payment of a MEMBER S FUND CREDIT and, if applicable, the INSURED AMOUNT, as a benefit to the MEMBER or the MEMBER S BENEFICIARIES when such a benefit becomes payable in terms of the Rules; (ii) Deductions from MEMBERS FUND CREDITS in terms of Rule 11; (iii) Such deduction from a MEMBER S FUND CREDIT as may be required to settle in full or in part a claim against a housing loan guarantee given by the FUND in respect of that MEMBER in terms of Rule 13.2; (iv) Payment of greater benefits in terms of Rule 18; (v) Payments in respect of MEMBERS FUND CREDITS as may be required on termination or partial termination of the FUND under Rule 10 or Rule ; and; (vi) FUND INTEREST, if negative. Rule 4.2A added by Rule Amendment 6 w.e.f. 1 April Reserve Accounts Eight Reserve Accounts, to be known as the Risk Reserve Account, the Investment Smoothing Reserve Account, the Administration Reserve Account, the Employer Surplus Account No. 1, the Employer Surplus Account No. 2, the Employer Surplus Account No.3, the Member Surplus Account and the Data Reserve Account, shall be maintained under the FUND and shall operate in accordance with Rules 4.3.1, 4.3.2, 4.3.3, 4.3.4, 4.3.5, 4.3.6, and respectively Risk Reserve Account To the Risk Reserve Account shall be credited any amount required to be credited in terms of Rule The amount standing to the credit of the Risk Reserve Account shall be increased by FUND INTEREST The amount standing to the credit of the Risk Reserve Account shall be used to pay any premium required by a

20 REGISTERED INSURER to meet the cost of the INSURED PORTION Amounts may be withdrawn from the Risk Reserve Account and utilised for the enhancement of MEMBERS FUND CREDITS, subject to the requirements of the REVENUE AUTHORITIES Amounts may be transferred from the Risk Reserve Account to the Member Surplus Account or the Employer Surplus Account No.3, as decided by the TRUSTEES after consultation with the VALUATOR in terms of Rule Amounts may also be transferred from the Risk Reserve Account to the Data Reserve Account as decided by the TRUSTEES after consultation with the VALUATOR Investment Smoothing Reserve Account To the Investment Smoothing Reserve Account shall be credited the amount (if applicable) by which the investment earnings of the FUND exceed FUND INTEREST The amount standing to the credit of the Investment Smoothing Reserve Account shall be increased by FUND INTEREST The amount standing to the credit of the Investment Smoothing Reserve Account shall be used to stabilise the investment returns of the FUND Amounts may be transferred from the Investment Smoothing Reserve Account to the Member Surplus Account or the Employer Surplus Account No.3, as decided by the TRUSTEES after consultation with the VALUATOR in terms of Rule Amounts may also be transferred from the Investment Smoothing Reserve Account to the Data Reserve Account as decided by the TRUSTEES after consultation with the VALUATOR Notwithstanding the above, with effect from 31 March 2016 the Investment Smoothing Reserve Account shall be closed

21 and any balance remaining in the account shall be transferred to the Members General Account maintained in terms of Rule 4.2A. Rule added by Rule Amendment 6 w.e.f. 1 April Administration Reserve Account To the Administration Reserve Account shall be credited the EMPLOYER contributions made in terms of Rule The amount standing to the credit of the Administration Reserve Account shall be increased by FUND INTEREST The amount standing to the credit of the Administration Reserve Account shall be applied to meet the cost of the expenses of the FUND Amounts may be withdrawn from the Administration Reserve Account and utilised for the enhancement of MEMBERS FUND CREDITS, subject to the requirements of the REVENUE AUTHORITIES Amounts may be transferred from the Administration Reserve Account to the Member Surplus Account or the Employer Surplus Account No.3, as decided by the TRUSTEES after consultation with the VALUATOR in terms of Rule Amounts may also be transferred from the Administration Reserve Account to the Data Reserve Account as decided by the TRUSTEES after consultation with the VALUATOR Employer Surplus Account No To the Employer Surplus Account No. 1 shall be credited the EQUALISATION PREFUNDING AMOUNTS paid by the PRINCIPAL EMPLOYER in terms of Rule 4.2.7, together with such FUND INTEREST as the ACTUARY may calculate is appropriate to be credited to the amount standing to the credit of this Account from time to time.

22 So much of the amount to the credit of the Employer Surplus Account No. 1 as is equal to the EQUALISATION AMOUNTS or TERMINAL GRATUITIES, if payable, shall be credited to the FUND CREDIT of a MEMBER on his or her retirement, death or withdrawal If the ACTUARY certifies that the amount to the credit of the Employer Surplus Account No. 1 is in excess of the liability of the FUND in respect of EQUALISATION AMOUNTS and TERMINABLE GRATUITIES then on the request in writing of the PRINCIPAL EMPLOYER so much of such excess shall be used to fund any contribution payable by any EMPLOYER in terms of Rules 4.2.1, 4.2.2, 4.2.3, 4.2.6, and Employer Surplus Account No To the Employer Surplus Account No. 2 shall be credited the contributions in respect of the ADDITIONAL SERVICE BENEFIT paid by the PRINCIPAL EMPLOYER in terms of Rule 4.2.8, together with such FUND INTEREST as the ACTUARY may calculate is appropriate to be credited to the amount standing to the credit of this Account from time to time So much of the amount to the credit of the Employer Surplus Account No. 2 as is equal to the ADDITIONAL SERVICE BENEFIT, if payable, shall be credited to the FUND CREDIT of a MEMBER on his or her retirement, death or withdrawal If the ACTUARY certifies that the amount to the credit of the Employer Surplus Account No. 2 is in excess of the liability of the FUND in respect of the ADDITIONAL SERVICE BENEFITS then on the request in writing of the PRINCIPAL EMPLOYER so much of such excess shall be used to fund any contribution payable by any EMPLOYER in terms of Rules 4.2.1, 4.2.2, 4.2.3, 4.2.6, and Employer Surplus Account No. 3

23 An Employer Surplus Account No.3 is established in the FUND. This account comprises any actuarial surplus apportioned for the benefit of the EMPLOYERS in terms of Rule 19.3 and section 15C of the ACT Any amount allocated by the TRUSTEES after consultation with the VALUATOR in terms of Rule 19.3 for the benefit of the EMPLOYERS shall be credited to this account The amount standing to the credit of this account will be increased by FUND INTEREST This account will be debited with any amounts as follows: any amount utilised for the benefit of the EMPLOYERS, at the PRINCIPAL EMPLOYER S request in terms of sections 15E and 15J of the ACT; any amount transferred to any other account of the FUND at the request of the PRINCIPAL EMPLOYER to the TRUSTEES; any amount required to meet a deficit in the FUND as disclosed by an actuarial valuation of the FUND in terms of Rule 13.5; amounts applied on the liquidation of the FUND as provided for in section 15I of the ACT Member Surplus Account A Member Surplus Account is established in the FUND. This account comprises any actuarial surplus apportioned for the benefit of MEMBERS in terms of Rule 19.3 and section 15C of the ACT Any amount allocated by the TRUSTEES after consultation with the VALUATOR in terms of Rule 19.3 for the benefit of MEMBERS shall be credited to this account The amount standing to the credit of this account will be increased by FUND INTEREST This account will be debited with any amounts as follows:

24 so much as the MEMBER-elected TRUSTEES allocate to improve benefits for such of the MEMBERS as they determine, in accordance with section 15D of the ACT; so much as the MEMBER-elected TRUSTEES determine, in accordance with section 15D of the ACT, is appropriate to improve the benefits previously paid to, or amounts previously transferred in respect of those FORMER MEMBERS who exited the FUND after 31 March 2002; so much as the MEMBER-elected TRUSTEES allocate to reduce current contributions due from MEMBERS; so much as the MEMBER-elected TRUSTEES allocate to meet, in full, or in part, expenses which would otherwise reduce the interests of MEMBERS in the FUND Data Reserve Account A Data Reserve Account is established in the FUND. The Data Reserve Account will be used to absorb strains caused by erroneous data in respect of the FUND An amount deemed appropriate by the TRUSTEES, after consultation with the ACTUARY will be credited to this account following the valuation of the FUND by the ACTUARY from time to time provided that the amount will comply with any guidelines issued by the REGISTRAR The amount standing to the credit of the Data Reserve Account will be increased by FUND INTEREST The Data Reserve Account will be debited with any amounts required to be paid from the account in respect of data errors Amounts may be transferred from the Data Reserve Account to the Member Surplus Account or the Employer Surplus Account No.3, as decided by the TRUSTEES after

25 consultation with the VALUATOR in terms of Rule Amounts may also be transferred from the Data Reserve Account to the Members General Account, the Risk Reserve Account, the Administration Reserve Account or (up to 31 March 2016) the Investment Smoothing Reserve Account, as decided by the TRUSTEES after consultation with the VALUATOR. Rule amended by Rule Amendment 6 w.e.f. 1 April 2015

26 PENSION BENEFITS 5.1 Amount of Pension On retirement in terms of RULE 5.2 a MEMBER shall receive a PENSION of such amount as can be purchased by his/her FUND CREDIT at the date of his/her retirement; provided that:- (a) The MEMBER may elect to commute up to one-third of his/her PENSION for a lump sum; and (b) The PENSION payable to a MEMBER on his/her retirement shall be of such amount as can be provided by his/her FUND CREDIT at the date of his/her retirement after the exercise of any option in terms of Rule 6.2. Replaced by Rule Amendment 5 w.e.f. 1 April A DEFERRED BENEFICIARY who retires shall become entitled to a PENSION of such amount as can be provided by his/her PAID-UP BENEFIT at the date of his/her retirement after the exercise of any option in terms of Rule An annuity that becomes payable in terms of RULE shall be purchased by the FUND in the name of the MEMBER from a REGISTERED INSURER of the MEMBER S choice and thereafter the FUND shall have no further liability in respect of the MEMBER, such liability resting with the REGISTERED INSURER from whom the annuity is purchased. The annuity so purchased shall be a compulsory, non-commutable, non-assignable annuity payable for life. 5.2 Retirement A MEMBER may retire on reaching his or her MINIMUM RETIREMENT DATE or on the last day of any month thereafter, provided that:- (a) a DISABILITY MEMBER must retire by no later than the retirement date specified in the DISABILITY ARRANGEMENT, or the date on which his or her disability income benefit ceases, if this is before the specified retirement date but on or after his or her MINIMUM RETIREMENT DATE; and (b) a MEMBER who is not a DISABILITY MEMBER or a DEFERRED BENEFICIARY must also retire from SERVICE as

27 at the date of retirement from the FUND. Replaced by Rule Amendment 5 w.e.f. 1 April If the TRUSTEES, after considering medical evidence acceptable to them, are satisfied that a MEMBER who does not qualify for a benefit in terms of the provisions of the DISABILITY ARRANGEMENT, has become totally and permanently incapable of efficiently carrying out his/her duties, they may agree to his/her retirement at any time before he/she reaches his/her MINIMUM RETIREMENT DATE. 6. PURCHASE AND COMMUTATION OF PENSION 6.1 Purchase of Pension The PENSION of each MEMBER who becomes entitled to a PENSION in terms of Rule 5 shall be purchased in his/her name from a REGISTERED INSURER of his/her choice. The terms and conditions applicable to such PENSION, including options elected by the MEMBER and the determination of any benefits arising on his/her death, shall be subject to the provisions of the ACT and shall be set out in writing by the REGISTERED INSURER; provided that: (a) the PENSION so purchased shall be compulsory, non-commutable, nonassignable and payable for life; and (b) on purchase of a PENSION in terms of this Rule, the FUND shall have no further liability in respect of such MEMBER, such liability resting with the REGISTERED INSURER from whom the PENSION is purchased Commutation of Pension At the COMMENCEMENT DATE of his/her PENSION, a retiring MEMBER may elect to commute for a lump sum: (a) if his/her PENSION does not exceed the limit set by the relevant legislation from time to time, the whole of the PENSION, or (b) if his/her PENSION exceeds the amount in (a), not more than one third of his/her PENSION. Where a MEMBER has a housing loan in respect of which the guarantee in terms of Rule 13.2 is still in force at the time of his/her retirement, he/she shall be obliged to commute a portion of his/her PENSION. The value of such commuted portion of

28 his/her PENSION shall, after making allowance for the deduction of any income tax, be equal to the amount outstanding in respect of his/her housing loan but shall not exceed the maximum amount allowed by legislation. 7. DEATH BENEFITS 7.1 Benefit Death in Service on or before the age agreed upon by the REGISTERED INSURER If a MEMBER other than a DEFERRED BENEFICIARY dies in SERVICE the following benefit shall become payable: An annuity of such amount as can be purchased with an amount equal to the MEMBER S FUND CREDIT plus his/her INSURED PORTION. An annuity purchased for a BENEFICIARY entitled to the benefit shall be purchased in his/her name from a REGISTERED INSURER of his/her choice. The terms and conditions applicable to such annuity, including any options elected by the BENEFICIARY shall be subject to the provisions of the ACT and shall be set out in writing by the REGISTERED INSURER; provided that, on purchase of an annuity in terms of this Rule, the FUND shall have no further liability in respect of such BENEFICIARY, such liability resting with the REGISTERED INSURER from whom the annuity is purchased. Provided that the BENEFICIARIES entitled to the benefit may elect to commute part or the whole of such benefit for a lump sum Death in Service after the age agreed upon by the REGISTERED INSURER If a MEMBER other than a DEFERRED BENEFICIARY dies while in SERVICE after the age agreed upon by the REGISTERED INSURER, his/her FUND CREDIT at the date of death shall be payable from the FUND as a lump sum benefit.

29 Death of a DEFERRED BENEFICIARY If a DEFERRED BENEFICIARY dies before payment of his/her benefit in accordance with Rule his/her PAID-UP BENEFIT at the date of his/her death shall be payable from the FUND as an annuity. The annuity that becomes payable shall be purchased by the FUND in the name of the BENEFICIARY from a REGISTERED INSURER of the BENEFICIARY S choice and thereafter the FUND shall have no further liability in respect of the BENEFICIARY, such liability resting with the REGISTERED INSURER from whom the annuity is purchased. Provided that the BENEFICIARIES entitled to the benefit may elect to commute part or the whole of such benefit for a lump sum. 7.2 Restrictions The TRUSTEES have power, where so required by the REGISTERED INSURER, to require a MEMBER to be examined at the REGISTERED INSURER'S expense by a medical practitioner appointed by the REGISTERED INSURER Acting on the results of this examination, the TRUSTEES in consultation with the ACTUARY may decide that the INSURED PORTION shall be restricted in such manner as imposed by the REGISTERED INSURER The TRUSTEES must inform the MEMBER in writing of the terms of any restriction imposed in terms of this Rule The INSURED PORTION shall be insured with a REGISTERED INSURER and no such benefit shall be provided by the FUND unless the claim for the benefit has been admitted by and recovered from the REGISTERED INSURER No increase in the PENSIONABLE SALARY of a DISABILITY MEMBER shall apply for the purposes of the INSURED PORTION without the prior agreement of the REGISTERED INSURER. Amended by Rule Amendment 5 w.e.f. 1 April Payment of Death Benefits Payment of a death benefit shall be made in terms of Section 37C of the ACT. (The contents of Section 37C of the ACT are contained in the Annexure to these RULES).

30 Beneficiary Nomination A MEMBER may nominate a BENEFICIARY to receive any benefit or part thereof payable from the FUND on the death of the MEMBER. Such nomination shall be filed with the FUND but no right, title or interest to any benefit shall vest in the nominated BENEFICIARY during the lifetime of the MEMBER, who may at any time amend such nomination by giving written notice thereof to the FUND. Any nomination shall automatically lapse if the beneficiary predeceases the MEMBER, and entitlement to receive any benefit will be subject to the provisions of Section 37C of the ACT. 7.5 Expenses incurred in respect of death benefit allocation investigations Any expenses incurred in conducting the investigations required to settle a death benefit, shall be paid by the FUND. Such expenses must be submitted in writing to the FUND before settlement. 8. TERMINATION OF SERVICE 8.1 Benefit If a MEMBER who is not already a DEFERRED BENEFICIARY leaves SERVICE before his/her retirement for any reason not specifically provided for in these RULES, he/she will become entitled to a lump sum benefit equal to his/her FUND CREDIT at the date of leaving SERVICE. A DISABILITY MEMBER may choose to withdraw from the FUND at any time, but in any event by no later than the retirement date specified in the DISABILITY ARRANGEMENT, or the date on which his or her disability income benefit ceases if earlier than the specified retirement date. In this case he or she will become entitled to a lump sum benefit, as a withdrawal benefit in terms of RULES (with the reference in to SERVICE in that RULE to mean the date of election to withdraw from the FUND) or 8.2.2, and not as a retirement benefit, equal to his/her FUND CREDIT at the date of leaving SERVICE. However, if the DISABILITY MEMBER chooses to withdraw from the FUND before his or her disability income benefit ceases, the option provided in 8.2.2(b) shall not be available to him or her. Paragraph added by Rule Amendment 5 w.e.f. 1 April Payment of Benefit The benefit in terms of this RULE shall be paid to the MEMBER as a